Delhi HC Orders Re-adjudication of GST Order Cancelled Due to Insufficient Reasons for Rejection

The Delhi High Court in its judgment addressed the matter of Mudita Express Cargo Private Limited versus the Commissioner, State Goods and Services Tax, Delhi & Another. A tax demand of Rs 2.4 crore against the petitioner has been quashed by the court citing inadequate reason for rejecting their response to the Show Cause Notice (SCN).

An order on 30.12.2023 has been contested by the applicant in which a tax demand of Rs 2,40,37,812 was proposed against them u/s 73 of the Central Goods and Services Tax Act, 2017. Even after the applicant furnishes the detailed answers with the supporting documents, the impugned order needs to regard their replies precisely. The order needed to have been clearer and had the consideration of the applicant’s submissions, the court remarked.

The proper officer considered the applicant’s response without proper documents and thus inadequate. The order fails to show that the proper officer had applied their mind to the submission of the applicant. No chance was provided by the applicant to clarify their response or furnish additional information if needed.

The court on seeing such imperfections set aside the impugned order and remitted the show cause notice to the Proper Officer for re-adjudication. 30 days have been provided to the applicant for filing a response and the Proper Officer was asked to accomplish a fresh adjudication with a personal hearing and pass a speaking order within the specified period.

The decision of the Delhi High Court stresses the importance of the consideration of the submissions and the due process in tax cases. Through quashing the GST tax demand and ordering for re-adjudication, the court assures that the applicant’s rights are secured and justice is provided. The importance of fair and clear procedures in tax proceedings has been stressed by this ruling, contributing to the virtue of the taxation system.